ZUG, Switzerland, May 11, 2017 /CNW/ - Katanga Mining
Limited (TSX: KAT) ("Katanga" or the
"Company") today announces its financial results for the
first quarter of 2017. Katanga's interim Financial Statements and
Management's Discussion and Analysis will be filed on SEDAR,
www.sedar.com.
Highlights during the three months ended March 31, 2017
|
|
|
|
|
Three months
ended
|
|
|
Mar 31,
|
Dec 31,
|
Mar 31,
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|
|
2017
|
2016
|
2016
|
Financial
|
|
|
|
|
Total
sales*
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$'000
|
(2)
|
3
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(27,884)
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- including
repricing*
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$'000
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(2)
|
3
|
(28,609)
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EBITDA**
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$'000
|
(52,466)
|
(64,468)
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(86,540)
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Net loss attributable
to shareholders
|
$'000
|
(100,923)
|
(113,219)
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(118,906)
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Cash flows from
operating activities
|
$'000
|
(17,330)
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(7,090)
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(78,842)
|
|
|
|
|
|
*
|
Negative price and
sales amounts are a result of quality discounts, adverse repricing
and mark to market ("M2M") adjustments
|
**
|
Refer to Item 21
in the MD&A; Non-IFRS Measures. Due to the suspension of
production C1 cash costs are not calculated for this
period.
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Review of 2017 First Quarter Results
- Profitability during Q1 2017, when compared to Q4 2016 and Q1
2016, was affected by:
-
- Lower mine infrastructure and support care and maintenance
costs of $20.9 million (Q4 2016 –
$33.8 million; Q1 2016 - $29.4 million) primarily due to the absence of
write-off of consumable stores inventory, which had a net impact to
the income statement of $9.9 million
and $3.3 million in Q4 2016 and Q1
2016, respectively;
- Higher KTC care and maintenance costs of $5.9 million due to increased maintenance
activities in preparation for the commissioning of the WOL Project,
which is expected to commence in Q4 2017 (Q4 2016 - $3.2 million; Q1 2016 - $3.1 million);
- Lower mining care and maintenance costs of $16.9 million due to increase in capitalized
pre-stripping as a result of higher waste tonnes mined (Q4 2016 -
$21.6 million). Compared to Q1 2016,
mining care and maintenance costs increased by $3.4 million, which is primarily caused by
additional geotechnical drilling in Q1 2017;
- The release of the restructuring provision relating to
contractor demobilisations and employee redundancy costs due to the
suspension of production, which resulted in an income of
$3.7 million in Q4 2016, was nil in
Q1 2017 (Q1 2016 - $3.1 million
expense);
- Income tax expense of $0.4
million in Q1 2017 relating to changes in the deferred tax
liability (Q4 2016 - $3.7 million
expense; Q1 2016 - $0.1 million
expense). Deferred tax recognition on tax losses carried forward in
the DRC ceased in Q2 2015. Such recognition will be reassessed on
commissioning of the WOL Project; and
- The $10.9 million increase in
allowance for obsolescence was offset by a write up in concentrate
inventory of $10.9 million during the
period.
- Cash outflows from operating activities decreased in Q1 2017,
when compared to Q1 2016, mainly due to a considerable reduction in
accounts payable in Q1 2016, which resulted in higher working
capital requirements, as well as a greater reduction in prepayments
in Q1 2017, compared to Q1 2016. Compared to Q4 2016, cash outflows
increased slightly, which mainly relates to a significant decrease
in inventories in Q4 2016. These cash outflows were funded by
Glencore.
Unless otherwise specified, all $ amounts referred to in this
press release are U.S. dollars.
Appointment of New Chief Operating Officer
Katanga also announces today the appointment of Mr. Deon Garbers as Chief Operating Officer. Mr.
Garbers holds a B.Ing (Metallurgy) from the University of
Pretoria and an MBA from the
University of Stellenbosch. He joins the Company from Swakop
Uranium, a wholly-owned subsidiary of Taurus Minerals Limited,
where he served as Senior Vice President: Operations from 2012 to
2016 and oversaw the development and construction of the Husab
Uranium project in Namibia.
Election of Directors
Katanga is pleased to announce that the nominees listed in the
management proxy circular for the 2017 Annual and Special Meeting
of Shareholders were elected as directors of Katanga. Detailed
results of the vote for the election of directors held at the
Annual and Special Meeting of Shareholders on May 10, 2017 in Toronto are set out below.
Nominee
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Votes
For
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%
For
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Votes
Withheld
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%
Withheld
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Hugh
Stoyell
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1,728,278,440
|
99.98
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316,550
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0.02
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Johnny
Blizzard
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1,728,255,426
|
99.98
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339,564
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0.02
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Liam
Gallagher
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1,728,266,570
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99.98
|
328,420
|
0.02
|
Aristotelis
Mistakidis
|
1,650,817,582
|
95.50
|
77,777,408
|
4.50
|
Terry
Robinson
|
1,728,278,440
|
99.98
|
315,550
|
0.02
|
Robert
Wardell
|
1,728,263,040
|
99.98
|
331,950
|
0.02
|
Tim
Henderson
|
1,728,252,070
|
99.98
|
342,920
|
0.02
|
About Katanga Mining Limited
Katanga Mining
Limited operates a major mine complex in the Democratic Republic of Congo producing refined
copper and cobalt. The Company has the potential to become
Africa's largest copper producer
and the world's largest cobalt producer. Katanga is listed on the
Toronto Stock Exchange under the symbol KAT.
Forward Looking Statements
This press
release may contain forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes",
or describes a "goal", or variation of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
All forward-looking statements reflect the Company's beliefs
and assumptions based on information available at the time the
statements were made. Actual results or events may differ from
those predicted in these forward-looking statements. All of the
Company's forward-looking statements are qualified by the
assumptions that are stated or inherent in such forward-looking
statements, including the assumptions listed below. Although the
Company believes that these assumptions are reasonable, this list
is not exhaustive of factors that may affect any of the
forward-looking statements. The key assumptions that have been made
in connection with the forward-looking statements include the
following: the operations of the Company during the production
suspension and timeline for the recommencement of operations
remaining consistent with management's expectations, there being no
significant disruptions affecting the operations of the Company
whether due to labour disruptions, supply disruptions, power
disruptions, rollout of new equipment, damage to equipment or
otherwise; permitting, development, operations, expansion and
acquisitions at the Project being consistent with the Company's
current expectations; continued recognition of the Company's mining
concessions and other assets, rights, titles and interests in the
DRC; political and legal developments in the DRC being consistent
with its current expectations; the continued provision or
procurement of additional funding from Glencore for operations, the
completion of the T17 Underground Mine, the WOL Project and the
Power Project (as defined in the Company's Annual Information Form
for the year ended December 31, 2016
dated March 31, 2017); new equipment
performs to expectations;; the exchange rate between the US dollar,
South African rand, British pounds, Canadian dollar, Swiss franc,
Congolese franc and Euro being approximately consistent with
current levels; certain price assumptions for copper and cobalt;
prices for diesel, natural gas, fuel oil, electricity and other key
supplies being approximately consistent with current levels;
production, operating expenses and cost of sales forecasts for the
Company meeting expectations; the accuracy of the current ore
reserve and mineral resource estimates of the Company (including
but not limited to ore tonnage and ore grade estimates); and labour
and material costs increasing on a basis consistent with the
Company's current expectations.
Forward-looking statements involve known and unknown risks,
future events, conditions, uncertainties and other factors which
may cause the actual results, performance or achievements to be
materially different from any future results, prediction,
projection, forecast, performance or achievements expressed or
implied by the forward-looking statements. Such factors include,
among others, the unforeseen delays or changes to the WOL Project;
actual results of current exploration activities; actual results
and interpretation of current reclamation activities; conclusions
of economic evaluations; changes in project parameters as plans
continue to be refined; future prices of copper and cobalt;
possible variations in ore grade or recovery rates; failure of
plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion
of exploration, development or construction activities, delays due
to strikes or other work stoppage, both internal and external to
the Company as well as those factors disclosed in the Company's
current annual information form and other publicly filed documents.
Although Katanga has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
The Company disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events, or otherwise, except in accordance with
applicable securities laws.
SOURCE Katanga Mining Limited